Managing

Change and
Innovation

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Compare and contrast views on the change
process.
Classify types of organizational change.
Explain how to manage resistance to change.
Discuss contemporary issues in managing change.
Describe techniques for stimulating innovation.

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 Two Views of the Change Process

• The Calm Waters Metaphor

– change is a break in the organization’s equilibrium
state.
• Unfreezing the current state
• Changing to a new state
• Refreezing to make the change permanent
• White-Water Rapids Metaphor
– The constantly changing and unpredictable business
environment requires managers and organizations to
actively manage change to survive and remain
competitive.

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 Exhibit 7-1
External and Internal Forces for Change

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 Exhibit 7-2
The Three-Step Change Process

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 What Is Organizational Change?

• Organizational Change - any alterations

in the people, structure, or technology of
an organization.
• Change Agents - persons who act as
catalysts and assume the responsibility for
managing the change process.

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 Types of Change

• Structure
– Changing an organization’s structural components or
its structural design
• Technology
– Adopting new equipment, tools, or operating methods
that displace old skills and require new ones
• Automation – (replacing certain tasks done by people with
machines)
• Computerization
• People
– Changing attitudes, (expectations), perceptions, and
behaviors of the workforce
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 Exhibit 7-3
Three Types of Change

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 Changing People

• Organizational Development (OD) -

techniques or programs to change people
and the nature and quality of interpersonal
work relationships.
• Global OD - OD techniques that work for
U.S. organizations may be inappropriate in
other countries and cultures.

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 Exhibit 7-4
Popular OD Techniques

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 Why Do People Resist Change?

• The uncertainty that change introduces

• The comfort of old habits
• A concern over personal loss of status, money,
authority.
• The perception that change is incompatible with
the goals and interest of the organization

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Techniques for Reducing Resistance to
Change

• Education and communication

• Participation
• Facilitation and support
• Negotiation
• Manipulation and co-optation
• Coercion

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 Exhibit 7-5
Techniques for Reducing Resistance to Change

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 Changing Organizational Culture

• Cultures are naturally resistant to change.

• Conditions that facilitate cultural change:
– The occurrence of a dramatic crisis
– Leadership changing hands
– A young, flexible, and small organization
– A weak organizational culture

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 Understanding the Situational Factors

• New top leadership can provide an

alternative set of key values
• The organization is young and small.
• Culture is weak

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 Employee Stress

• Stress - Stress is a physical and

emotional response to external pressures
that can affect health and well-being.
• Stressors - factors that cause stress.

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 What Causes Stress?

• Role Conflicts - work expectations that

are hard to satisfy.
• Role Overload - having more work to
accomplish than time permits.
• Role Ambiguity - when role expectations
are not clearly understood.

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 What Causes Stress (cont.)?

• Interpersonal demands - pressures

created by other employees
• Organization structure - excessive rules
and an employee’s lack of opportunity to
participate in decisions
• Organizational leadership - the
supervisory style of the organization’s
managers

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 Personal Factors that can Create Stress

• Type A personality - person constantly

feels the need to act quickly, even where
there is no dead-line and intense desire to
succeed and outperform others
• Type B personality - people who are
relaxed and easygoing and accept change
easily.

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 Exhibit 7-7
Symptoms of Stress

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 How Can Stress Be Reduced?

• Job-related factors begin with employee

selection.
• A realistic job preview during the selection
process can minimize stress by reducing
ambiguity over job expectations.
• Performance planning program such as
MBO (management by objectives) will
clarify job responsibilities, provide clear
performance goals, and reduce ambiguity.
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 Stimulating Innovation

• Creativity - the ability to combine ideas in

a unique way.
• Innovation - turning the outcomes of the
creative process into useful products,
services, or work methods.

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 Exhibit 7-9
Innovation Variables

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 Structural Variables

• An organic-type structure positively

influences innovation.
• The availability of plentiful resources
provides a key building block for
innovation.
• Frequent communication between
organizational units helps break down
barriers

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 Structural Variables (cont.)

• Innovative organizations try to minimize

extreme time pressures on creative
activities.
• Studies show that an employee’s creative
performance was enhanced when an
organization’s structure explicitly
supported creativity

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 Cultural Variables

• Accept ambiguity - too much emphasis on

objectivity and specificity constrains
creativity.
• Tolerate the impractical - What at first seems
impractical might lead to innovative solutions
• Keep external controls minimal - rules,
regulations, policies, and similar
organizational controls are kept to a
minimum.
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 Cultural Variables (cont.)

• Tolerate risk. Employees are encouraged

to experiment without fear of
consequences should they fail.
• Tolerate conflict. Diversity of opinions is
encouraged.
• Focus on ends rather than means. -
individuals are encouraged to consider
alternative routes toward meeting the
goals
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 Cultural Variables (cont.)

• Use an open-system focus - managers

closely monitor the environment and
respond to changes as they occur.
• Provide positive feedback. Managers
provide positive feedback,
encouragement, and support.
• Exhibit empowering leadership - leaders
lets organizational members know that the
work they do is significant
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 Human Resource Variables

• Idea champion - individuals who actively

and (enthusiastically) support new ideas,
build support, overcome resistance, and
ensure that innovations are implemented

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 Innovation and Design Thinking

• A strong connection exists between design

thinking and innovation.
• With a design thinking mentality, the
emphasis is on getting a deeper
understanding of what customers need
and want

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Copyright © 2014 Pearson©Education,
2012 Pearson Education,
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 Review Learning Outcome 7.1

• Compare and contrast views on the

change process
– Calm waters metaphor - change is an
occasional disruption and can be planned and
managed as it happens
– White-water rapids metaphor - change is
ongoing and managing it is a continual
process
– Lewin’s three-step: unfreezing, changing, and
refreezing
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Copyright © 2014 Pearson©Education,
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 Review Learning Outcome 7.2

• Classify types of organizational change

– Organizational change is any alteration of
people, structure, or technology
– Changing structure involves any changes in
structural components or structural design
– Changing technology involves introducing
new equipment, tools, or methods;
automation; or computerization
– Changing people involves changing attitudes,
expectations, perceptions, and behaviors
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 Review Learning Outcome 7.3

• Explain how to manage resistance to

change
– People resist change because of uncertainty,
habit, concern over personal loss, and the
belief that the change is not in the
organization’s best interest.
– Techniques for reducing resistance to change
include: education and communication ,
participation, facilitation and , negotiation,
manipulation and co-optation, and coercion.
Copyright
Copyright © 2014 Pearson©Education,
2012 Pearson Education,
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